Hong Lai Huat’s wholly-owned subsidiary, HLH Agriculture (Cambodia) has, on June 8, entered into a memorandum of understanding (MOU) with Cambodia Hei Shi Mineral Co to collaborate on the exploration and mining of mineral resources at the Cambodia-Singapore Agriculture Hub.

The collaboration has an estimated investment value of US$20 million ($26.5 million).

The MOU states that both HLH Agriculture and Cambodia Hei Shi Mineral regard one another as a strategic partner and will focus on the following aspects within the next three months to enter into a binding agreement.

Want our latest Singapore corporate news stories for FREE

Follow our Telegram, Facebook for the latest updates round the clock

Through the MOU, both parties will establish a joint venture (JV) where HLH Agriculture will be responsible for providing the land and allocation of mining rights. Cambodia Hei Shi Mineral will leverage on its established mining track record to run the mining operations and be responsible for all costs incurred towards hiring enough skilled labour and personnel, machineries and technical supports, as well as developing infrastructures for mining operations within the operation budget agreed between both parties.

HLH Agriculture will be entitled to 60% of the profit generated from the JV company.

See also: Hong Lai Huat's property and real estate division to be affected by Cambodia lockdown

The term of the JV will be for a period of 10 years with an option to renew for further terms.

The JV will utilise the mineral resources found within the land for the construction of infrastructure, factories and buildings inside the Agriculture Hub.

In addition, the collaboration will provide more job opportunities in Cambodia, especially for locals living in Aoral District, Kampong Speu Province.

“The mining operations will be under the allocated construction material zone of the Agri Hub. As exquisite natural minerals have been found on our land such as marble and granite, this partnership will enable the group to mine and supply these exquisite natural minerals to meet the market demand and to develop the infrastructures in Agri Hub,” says Ong Jia Jing, Hong Lai Huat’s group general manager and executive director.

“The mineral resources extracted shall also contribute immensely to the growth of the group as well as our shareholders for many years to come,” Ong adds.

Shares in Hong Lai Huat closed 0.2 cent higher or 2.2% up at 9.4 cents on June 8.